ERICSSON (LM) TEL-SP ADR (ERIC) Stock Fundamental Analysis
USA - NASDAQ:ERIC - US2948216088 - ADR
9.73 USD
-0.01 (-0.1%)
9.72 USD
-0.01 (-0.1%)
Overall ERIC gets a fundamental rating of 6 out of 10. We evaluated ERIC against 48 industry peers in the Communications Equipment industry. ERIC has an excellent profitability rating, but there are some minor concerns on its financial health. ERIC scores decently on growth, while it is valued quite cheap. This could make an interesting combination. Finally ERIC also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year ERIC was profitable.
In the past year ERIC had a positive cash flow from operations.
ERIC had positive earnings in 4 of the past 5 years.
Each year in the past 5 years ERIC had a positive operating cash flow.
1.2 Ratios
The Return On Assets of ERIC (8.72%) is better than 83.33% of its industry peers.
Looking at the Return On Equity, with a value of 24.01%, ERIC belongs to the top of the industry, outperforming 89.58% of the companies in the same industry.
ERIC has a better Return On Invested Capital (15.20%) than 89.58% of its industry peers.
ERIC had an Average Return On Invested Capital over the past 3 years of 10.59%. This is below the industry average of 13.01%.
The last Return On Invested Capital (15.20%) for ERIC is above the 3 year average (10.59%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.72% | ||
| ROE | 24.01% | ||
| ROIC | 15.2% |
ROA(3y)-1.18%
ROA(5y)2.06%
ROE(3y)-4.3%
ROE(5y)5.63%
ROIC(3y)10.59%
ROIC(5y)12.19%
1.3 Margins
ERIC's Profit Margin of 10.26% is amongst the best of the industry. ERIC outperforms 83.33% of its industry peers.
ERIC's Profit Margin has declined in the last couple of years.
The Operating Margin of ERIC (12.97%) is better than 79.17% of its industry peers.
In the last couple of years the Operating Margin of ERIC has grown nicely.
With a decent Gross Margin value of 47.62%, ERIC is doing good in the industry, outperforming 62.50% of the companies in the same industry.
ERIC's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.97% | ||
| PM (TTM) | 10.26% | ||
| GM | 47.62% |
OM growth 3Y-12.66%
OM growth 5Y14.26%
PM growth 3Y-90.62%
PM growth 5Y-61.69%
GM growth 3Y1.11%
GM growth 5Y3.7%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so ERIC is creating value.
Compared to 1 year ago, ERIC has about the same amount of shares outstanding.
ERIC has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, ERIC has an improved debt to assets ratio.
2.2 Solvency
ERIC has a debt to FCF ratio of 1.45. This is a very positive value and a sign of high solvency as it would only need 1.45 years to pay back of all of its debts.
ERIC has a Debt to FCF ratio of 1.45. This is in the better half of the industry: ERIC outperforms 72.92% of its industry peers.
ERIC has a Debt/Equity ratio of 0.35. This is a healthy value indicating a solid balance between debt and equity.
With a Debt to Equity ratio value of 0.35, ERIC is not doing good in the industry: 66.67% of the companies in the same industry are doing better.
Although ERIC does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | 1.45 | ||
| Altman-Z | N/A |
ROIC/WACC2.39
WACC6.37%
2.3 Liquidity
A Current Ratio of 1.17 indicates that ERIC should not have too much problems paying its short term obligations.
ERIC has a Current ratio of 1.17. This is amonst the worse of the industry: ERIC underperforms 81.25% of its industry peers.
ERIC has a Quick Ratio of 1.17. This is a bad value and indicates that ERIC is not financially healthy enough and could expect problems in meeting its short term obligations.
ERIC's Quick ratio of 0.94 is on the low side compared to the rest of the industry. ERIC is outperformed by 75.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.17 | ||
| Quick Ratio | 0.94 |
3. Growth
3.1 Past
ERIC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 541.12%, which is quite impressive.
ERIC shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -17.01% yearly.
The Revenue has decreased by -2.65% in the past year.
Measured over the past years, ERIC shows a small growth in Revenue. The Revenue has been growing by 1.76% on average per year.
EPS 1Y (TTM)541.12%
EPS 3Y-38.27%
EPS 5Y-17.01%
EPS Q2Q%113.66%
Revenue 1Y (TTM)-2.65%
Revenue growth 3Y2.19%
Revenue growth 5Y1.76%
Sales Q2Q%-8.99%
3.2 Future
Based on estimates for the next years, ERIC will show a very strong growth in Earnings Per Share. The EPS will grow by 29.10% on average per year.
ERIC is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -0.77% yearly.
EPS Next Y271.88%
EPS Next 2Y89.39%
EPS Next 3Y55.91%
EPS Next 5Y29.1%
Revenue Next Year-3.55%
Revenue Next 2Y-1.45%
Revenue Next 3Y-0.62%
Revenue Next 5Y-0.77%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 10.93 indicates a reasonable valuation of ERIC.
Compared to the rest of the industry, the Price/Earnings ratio of ERIC indicates a rather cheap valuation: ERIC is cheaper than 91.67% of the companies listed in the same industry.
ERIC is valuated cheaply when we compare the Price/Earnings ratio to 25.83, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 15.10, which indicates a correct valuation of ERIC.
ERIC's Price/Forward Earnings ratio is rather cheap when compared to the industry. ERIC is cheaper than 83.33% of the companies in the same industry.
ERIC's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 32.68.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.93 | ||
| Fwd PE | 15.1 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ERIC indicates a rather cheap valuation: ERIC is cheaper than 93.75% of the companies listed in the same industry.
91.67% of the companies in the same industry are more expensive than ERIC, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.17 | ||
| EV/EBITDA | 7.2 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of ERIC may justify a higher PE ratio.
ERIC's earnings are expected to grow with 55.91% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.04
PEG (5Y)N/A
EPS Next 2Y89.39%
EPS Next 3Y55.91%
5. Dividend
5.1 Amount
ERIC has a Yearly Dividend Yield of 2.95%.
ERIC's Dividend Yield is rather good when compared to the industry average which is at 3.41. ERIC pays more dividend than 89.58% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.39, ERIC pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.95% |
5.2 History
The dividend of ERIC is nicely growing with an annual growth rate of 22.02%!
ERIC has been paying a dividend for at least 10 years, so it has a reliable track record.
As ERIC did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)22.02%
Div Incr Years5
Div Non Decr Years5
5.3 Sustainability
ERIC pays out 37.84% of its income as dividend. This is a sustainable payout ratio.
The dividend of ERIC is growing, but earnings are growing more, so the dividend growth is sustainable.
DP37.84%
EPS Next 2Y89.39%
EPS Next 3Y55.91%
9.73
-0.01 (-0.1%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners54.97%
Inst Owner Change-0.34%
Ins Owners0.07%
Ins Owner ChangeN/A
Market Cap32.43B
Revenue(TTM)240.31B
Net Income(TTM)24.64B
Analysts56.43
Price Target9.25 (-4.93%)
Short Float %1.05%
Short Ratio2.18
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.95% |
Yearly Dividend0.29
Dividend Growth(5Y)22.02%
DP37.84%
Div Incr Years5
Div Non Decr Years5
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)49.11%
Min EPS beat(2)20.62%
Max EPS beat(2)77.6%
EPS beat(4)3
Avg EPS beat(4)34.33%
Min EPS beat(4)-10.72%
Max EPS beat(4)77.6%
EPS beat(8)6
Avg EPS beat(8)-29.88%
EPS beat(12)9
Avg EPS beat(12)-11.71%
EPS beat(16)10
Avg EPS beat(16)-8.77%
Revenue beat(2)0
Avg Revenue beat(2)-3.63%
Min Revenue beat(2)-6.39%
Max Revenue beat(2)-0.88%
Revenue beat(4)0
Avg Revenue beat(4)-2.46%
Min Revenue beat(4)-6.39%
Max Revenue beat(4)-0.45%
Revenue beat(8)1
Avg Revenue beat(8)-2.31%
Revenue beat(12)3
Avg Revenue beat(12)-1.5%
Revenue beat(16)7
Avg Revenue beat(16)-0.68%
PT rev (1m)8.4%
PT rev (3m)22.29%
EPS NQ rev (1m)14.05%
EPS NQ rev (3m)14.39%
EPS NY rev (1m)-0.03%
EPS NY rev (3m)1.46%
Revenue NQ rev (1m)-0.17%
Revenue NQ rev (3m)-0.47%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.31%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.93 | ||
| Fwd PE | 15.1 | ||
| P/S | 1.29 | ||
| P/FCF | 10.17 | ||
| P/OCF | 9.1 | ||
| P/B | 3.01 | ||
| P/tB | 6.89 | ||
| EV/EBITDA | 7.2 |
EPS(TTM)0.89
EY9.15%
EPS(NY)0.64
Fwd EY6.62%
FCF(TTM)0.96
FCFY9.84%
OCF(TTM)1.07
OCFY10.99%
SpS7.57
BVpS3.23
TBVpS1.41
PEG (NY)0.04
PEG (5Y)N/A
Graham Number8.04
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.72% | ||
| ROE | 24.01% | ||
| ROCE | 19.24% | ||
| ROIC | 15.2% | ||
| ROICexc | 22.2% | ||
| ROICexgc | 46.36% | ||
| OM | 12.97% | ||
| PM (TTM) | 10.26% | ||
| GM | 47.62% | ||
| FCFM | 12.65% |
ROA(3y)-1.18%
ROA(5y)2.06%
ROE(3y)-4.3%
ROE(5y)5.63%
ROIC(3y)10.59%
ROIC(5y)12.19%
ROICexc(3y)14.83%
ROICexc(5y)17.86%
ROICexgc(3y)47.09%
ROICexgc(5y)43.4%
ROCE(3y)13.4%
ROCE(5y)15.43%
ROICexgc growth 3Y9.12%
ROICexgc growth 5Y7.91%
ROICexc growth 3Y-8.84%
ROICexc growth 5Y4.9%
OM growth 3Y-12.66%
OM growth 5Y14.26%
PM growth 3Y-90.62%
PM growth 5Y-61.69%
GM growth 3Y1.11%
GM growth 5Y3.7%
F-Score6
Asset Turnover0.85
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | 1.45 | ||
| Debt/EBITDA | 0.87 | ||
| Cap/Depr | 36.83% | ||
| Cap/Sales | 1.48% | ||
| Interest Coverage | 13.31 | ||
| Cash Conversion | 83.18% | ||
| Profit Quality | 123.37% | ||
| Current Ratio | 1.17 | ||
| Quick Ratio | 0.94 | ||
| Altman-Z | N/A |
F-Score6
WACC6.37%
ROIC/WACC2.39
Cap/Depr(3y)47.04%
Cap/Depr(5y)51.35%
Cap/Sales(3y)1.94%
Cap/Sales(5y)2.02%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)541.12%
EPS 3Y-38.27%
EPS 5Y-17.01%
EPS Q2Q%113.66%
EPS Next Y271.88%
EPS Next 2Y89.39%
EPS Next 3Y55.91%
EPS Next 5Y29.1%
Revenue 1Y (TTM)-2.65%
Revenue growth 3Y2.19%
Revenue growth 5Y1.76%
Sales Q2Q%-8.99%
Revenue Next Year-3.55%
Revenue Next 2Y-1.45%
Revenue Next 3Y-0.62%
Revenue Next 5Y-0.77%
EBIT growth 1Y54.66%
EBIT growth 3Y-10.75%
EBIT growth 5Y16.26%
EBIT Next Year81.48%
EBIT Next 3Y20.93%
EBIT Next 5Y13.49%
FCF growth 1Y392.6%
FCF growth 3Y7.36%
FCF growth 5Y33.08%
OCF growth 1Y169.74%
OCF growth 3Y5.8%
OCF growth 5Y22.35%
ERICSSON (LM) TEL-SP ADR / ERIC FAQ
What is the fundamental rating for ERIC stock?
ChartMill assigns a fundamental rating of 6 / 10 to ERIC.
Can you provide the valuation status for ERICSSON (LM) TEL-SP ADR?
ChartMill assigns a valuation rating of 9 / 10 to ERICSSON (LM) TEL-SP ADR (ERIC). This can be considered as Undervalued.
How profitable is ERICSSON (LM) TEL-SP ADR (ERIC) stock?
ERICSSON (LM) TEL-SP ADR (ERIC) has a profitability rating of 8 / 10.
Can you provide the PE and PB ratios for ERIC stock?
The Price/Earnings (PE) ratio for ERICSSON (LM) TEL-SP ADR (ERIC) is 10.93 and the Price/Book (PB) ratio is 3.01.
Can you provide the financial health for ERIC stock?
The financial health rating of ERICSSON (LM) TEL-SP ADR (ERIC) is 4 / 10.